Thursday, February 17, 2011

On Monday February 14, WineAmerica joined with our producer and importer trade association partners in expressing our opposition to the wholesaler-sponsored bill known as the Comprehensive Alcohol Regulatory Enforcement Act (CARE Act) or, more appropriately, the Wholesaler Protection Act. The purpose of our joint producer letter, available at http://www.winebusiness.com/content/file/Joint_Producer_Letter_GO_2_14_2011.pdf, is to ensure that members of Congress, particularly new members of Congress, understand the ramifications and intent of this harmful bill before it is reintroduced this year. As we noted in our joint letter, “[t]he 2010 bill would have invited enactment of discriminatory state laws and protracted litigation.”

When the CARE Act was introduced last Congressional session it was dropped under the bill number H.R. 5034. The bill will have a new bill number when it is reintroduced this session, but that will not stop WineAmerica from forcefully opposing the CARE Act.

Our core arguments against the CARE Act are simple: not only does the bill seek to undermine a core Constitutional tenet—that interstate markets should be free and open—it does so through scare tactics that are fundamentally at odds with the evidence.

Wholesalers talk constantly about the threat of “state deregulation,” that any changes to the three-tier system—even thoughtful, well considered changes—will result in underage alcohol consumption and states being unable to collect alcohol excise and sales taxes. They use these arguments consistently to push for the CARE Act and to try and establish its “necessity.”

Reading the recent Direct Wine Shipping report put out by the Maryland Comptroller’s office, http://www.comp.state.md.us/DWS_Complete.pdf, several facts become clear: (1) state regulation of direct-to-consumer shipping is effective; (2) the safety protocols written into state direct shipping laws prevent deliveries to minors; and (3) bonding and reporting requirements give states the tools for effective tax collection on wine shipments.

The arguments wholesalers use to defend the CARE Act are simply untrue, and we will be on the front lines of this fight until the bill is ultimately defeated.